Dutch giant PMT concedes decision on pension rights cut a 'tight one'

The €48bn industry-wide metal scheme PMT said it would reduce its yearly pensions accrual from more than 2.2% to 1.9% but keep its contribution at the current level of 18.1% of the pensionable salary.

It is also to reduce its ‘franchise’ – the amount exempt from pensions accrual and for which no contribution is charged – from €15,904 to €15,554 in 2014.

It said it opted, with its new accrual, for highest possible percentage under new government plans, combined with a reduced franchise.

The scheme’s board said it decided to leave the premium unchanged at 18.1% to create leeway for improving PMT’s financial position.

It added that the employers would increase their part of the pension contribution from 53.2% to 63.2% to allow their workers a net salary rise.

This means the employers will also pay the full premium for transitional schemes for early retirement, according to PMT.

The pension fund’s coverage ratio was 104.1% at October-end and must be at least 104.3% at the end of this year in order for PMT to avoid further austerity measures.

Last April, the scheme had to apply a rights cut of 6.3%.

Annemieke Biesheuvel, PMT’s spokeswoman, said: “It is likely to be a very tight outcome.”

She said the scheme’s board could be facing a decision about a marginal cut of a few percentage points.

“The question would be whether or not to apply a tiny discount, as a cut wouldn’t be good for public support for pension funds,” she said.

The pension fund for metalworking and engineering has 1.2m participants in total, affiliated with 40,000 companies, and is the third-largest pension fund in the Netherlands.

Elsewhere, insurance holding Achmea announced that it would shed 4,000 of the 19,000 jobs at its various subsidiaries, including pensions provider, asset and property manager Syntrus Achmea.

Sources within the company said Syntrus Achmea’s 1,500 staff in De Meern, Amsterdam and Tilburg would not be affected by the cuts, apart from redundancies, as a consequence of already running and largely completed cost-cutting measures.